Manhattan real estate posted its best year ever, rebounding from the pandemic with a record $30 billion in deals, according to real estate reports.
More than 16,000 contracts were signed to reach the $30 billion total — both breaking records, according to a report from Corcoran. Many had thought the market would never return to pre-pandemic levels given the population losses, rising crime and high taxes, but many metrics are at or near 2019 strength — with bidding wars and falling inventory.
The strength shows no signs of slowing in 2022. Fourth-quarter sales volume of over $6.7 billion marked the best fourth quarter in at least 32 years, according to a report from Miller Samuel and Douglas Elliman.
The average price for an apartment in Manhattan is now $1.95 million. The median price — which many consider to be a more accurate measure — jumped 11% in the fourth quarter compared with a year ago, close to pre-pandemic levels.
“Clearly, the pace of the recovery in 2021 was faster than I think most people anticipated,” said Jonathan Miller, CEO of Miller Samuel. “It’s been startling.”
Brokers say the “pandemic discount” in Manhattan is now largely gone. Prices fell between 6% and 7% during the market bottom, but in many market segments, especially condos, prices have rebounded. According to Brown Harris Stevens, apartments are now selling at 97.6% of their last asking price, the highest since 2017.
Bidding wars are at their highest levels since 2018, according to Miller Samuel.
The comeback has largely been driven by the top of the market — specifically, wealthy buyers snapping up penthouses and large full-floor units in new developments. Inventory of new development plummeted by a third in the fourth quarter, the fastest decline ever. New-development apartments priced at $10 million or more sold the fastest — averaging just 97 days on the market, according to data from Serhant.
There were at least eight sales last year for more than $50 million, according to Miller Samuel. The biggest sale of the year was Alibaba Executive Vice Chairman Joe Tsai’s purchase of two full floors at 220 Central Park South for $157 million. Two of the other deals in price range were also at 220 Central Park South, which was already home to the most expensive residence ever sold in America — hedge fund billionaire Ken Griffin’s $238 million penthouse.
Jeff Bezos continued to collect apartments at 212 Fifth Avenue downtown, with his purchases now totaling $119 million over five apartments.
Brokers say many of the buyers are not New York residents or income tax payers. Instead, they are wealthy real estate investors looking for a pied-a-terre or an investment property. Trillions in wealth were created during the pandemic from rising stock markets, asset values and crypto. Many wealthy individuals are looking to covert their market gains into hard assets like real estate.
More than half of the deals in Manhattan last year were all-cash, according to brokers.
Based on shrinking inventory and continually strong financial markets, the Manhattan market is likely to remain robust into the first half of this year, Miller said.
“Because New York was late to the party with the return of real estate demand, there could be several quarters ahead with elevated or higher-than-normal activity,” he said.